Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2010

California Constitutional Provisions

Article XVI Public Finance

Section 16

Sec. 16. Taxation of redevelopment projects. All property in a redevelopment project established under the Community Redevelopment Law as now existing or hereafter amended, except publicly owned property not subject to taxation by reason of that ownership, shall be taxed in proportion to its value as provided in Section 1 of this article, and those taxes (the word "taxes" as used herein includes, but is not limited to, all levies on an ad valorem basis upon land or real property) shall be levied and collected as other taxes are levied and collected by the respective taxing agencies.

The Legislature may provide that any redevelopment plan may contain a provision that the taxes, if any, so levied upon the taxable property in a redevelopment project each year by or for the benefit of the State of California, any city, county, city and county, district, or other public corporation (hereinafter sometimes called "taxing agencies") after the effective date of the ordinance approving the redevelopment plan, shall be divided as follows:

(a) That portion of the taxes which would be produced by the rate upon which the tax is levied each year by or for each of those taxing agencies upon the total sum of the assessed value of the taxable property in the redevelopment project as shown upon the assessment roll used in connection with the taxation of that property by the taxing agency, last equalized prior to the effective date of the ordinance, shall be allocated to, and when collected shall be paid into, the funds of the respective taxing agencies as taxes by or for those taxing agencies on all other property are paid (for the purpose of allocating taxes levied by or for any taxing agency or agencies which did not include the territory in a redevelopment project on the effective date of the ordinance but to which the territory has been annexed or otherwise included after the ordinance's effective date, the assessment roll of the county last equalized on the effective date of that ordinance shall be used in determining the assessed valuation of the taxable property in the project on that effective date); and

(b) Except as provided in subdivision (c), that portion of the levied taxes each year in excess of that amount shall be allocated to and when collected shall be paid into a special fund of the redevelopment agency to pay the principal of and interest on loans, moneys advanced to, or indebtedness (whether funded, refunded, assumed or otherwise) incurred by the redevelopment agency to finance or refinance, in whole or in part, the redevelopment project. Unless and until the total assessed valuation of the taxable property in a redevelopment project exceeds the total assessed value of the taxable property in the project as shown by the last equalized assessment roll referred to in subdivision (a), all of the taxes levied and collected upon the taxable property in the redevelopment project shall be paid into the funds of the respective taxing agencies. When the loans, advances, and indebtedness, if any, and interest thereon, have been paid, then all moneys thereafter received from taxes upon the taxable property in the redevelopment project shall be paid into the funds of the respective taxing agencies as taxes on all other property are paid.

(c) That portion of the taxes identified in subdivision (b) which are attributable to a tax rate levied by a taxing agency for the purpose of producing revenues in an amount sufficient to make annual repayments of the principal of, and the interest on, any bonded indebtedness for the acquisition or improvement of real property shall be allocated to, and when collected shall be paid into, the fund of that taxing agency. This paragraph shall only apply to taxes levied to repay bonded indebtedness approved by the voters of the taxing agency on or after January 1, 1989.

The Legislature may also provide that in any redevelopment plan or in the proceedings for the advance of moneys, or making of loans, or the incurring of any indebtedness (whether funded, refunded, assumed or otherwise) by the redevelopment agency to finance or refinance, in whole or in part, the redevelopment project, the portion of taxes identified in subdivision (b), exclusive of that portion identified in subdivision (c), may be irrevocably pledged for the payment of the principal of and interest on those loans, advances, or indebtedness.

It is intended by this section to empower any redevelopment agency, city, county, or city and county under any authorized by this section to exercise the provisions hereof separately or in combination with powers granted by the same or any other relative to redevelopment agencies. This section shall not affect any other or s relating to the same or a similar subject but is intended to authorize an alternative method of procedure governing the subject to which it refers.

The Legislature shall enact those s as may be necessary to enforce the provisions of this section.

History.—New section added by amendment adopted November 5, 1974, which also repealed former Section 19 of Article XIII containing similar provisions. The amendment of November 8, 1988, substituted "the", "those", and "that" for "such" and made grammatical changes throughout the section; added "Except as provided in subdivision (c)" at the beginning of subdivision (b); added subdivision (c); and added ", exclusive of that portion identified in the first sentence of subdivision (c)," after "subdivision (b)" in the paragraph following subdivision (c).

Construction.—Article XIII B of the Constitution, which limits state and local government appropriations, is not applicable to this section, and Health and Safety Code Section 33678 is a valid legislative interpretation thereof. Brown v. Community Redevelopment Agency, 168 Cal.App.3d 1014; Bell Community Redevelopment Agency v. Woosley, 169 Cal.App.3d 24. The mandatory language in the first paragraph not only gives the Legislature the authority but also requires it to treat community redevelopment property like other property for purposes of levying and collecting property taxes. It does not prevent the Legislature from altering the levying and collection of taxes on redevelopment property in a manner consistent with which it alters the levying and collection of taxation on other property. Arcadia Redevelopment Agency v. Ikemoto, 16 Cal.App.4th 444; Community Redevelopment Agency v. Los Angeles County, 89 Cal.App.4th 719. A redevelopment agency is entitled to all tax increment funds as they become available, until its loans, advances and indebtedness, if any, and interest thereon have been paid. Since redevelopment agencies are statutorily empowered to enter into binding contracts to complete redevelopment projects, "indebtedness" includes all redevelopment obligations, whether pursuant to an executory contract, a performed contract, or to repay principal and interest on bonds or loans. Marek v. Napa Community Redevelopment Agency, 46 Cal.3d 1070. Escape assessments must be included in the tax increment calculation. Community Development Comm. of the City of Oxnard v. County of Ventura, 152 Cal.App.4th 1470.

Taxable property.—Whenever property within a redevelopment project is acquired by a tax-exempt public agency, the assessed value of the taxable property within the project must be redetermined, and the loss of tax revenue resulting from the acquisition should be divided proportionately between the redevelopment agency and the taxing agencies. Redevelopment Agency v. San Bernardino County, 21 Cal.3d 255.

Last equalized assessment roll.—The proper base roll to be used when dividing property tax revenues between taxing agencies and a redevelopment agency is the assessment roll prepared annually and which becomes the last equalized roll on August 20, not the adjusted assessment roll made later in the tax year as the result of assessment appeals board decisions and after a redevelopment plan ordinance had been adopted. Redevelopment Agency v. Los Angeles County, 75 Cal.App.4th 68.